Funding

Syndicated credit line and loan from the European Investment Bank ensure sufficient liquidity

In order to ensure sufficient liquidity, DEUTZ has at its disposal a syndicated, revolving working capital facility of €160 million provided by a consortium of banks. In 2017, we extended this facility on improved terms. It is a floating-rate, unsecured line and is due to mature in June 2022. DEUTZ can elect whether to utilise the cash line as a bilateral overdraft facility (up to €60 million) or to draw down amounts with interest periods of three to six months.

In addition, we have an amortising loan from the European Investment Bank with a remaining balance of €39.6 million at 31 December 2017. This loan, which is also unsecured, is repayable in instalments until July 2020. We have hedged the interest-rate risk arising from this loan.

As part of the contractual agreements for both loans, DEUTZ is obliged to comply with certain financial covenants. They do not limit our leeway for growth projects, however. The working capital facility and the loan from the European Investment Bank have enabled us to secure funding for our projects and for further growth over the coming years.

Receivables management optimised by means of factoring

The sale of receivables is an important way of optimising receivables management. Because the credit quality of our customer receivables is excellent, factoring is also a cost-effective way of improving working capital, especially as considerable cash resources are tied up by the preliminary financing of production and due to the payment terms that we have granted to our customers. The volume of sales of receivables on the balance sheet date was slightly higher than at the end of 2016 as a result of the business situation, the volume as at 31 December 2017 being around €117 million (31 December 2016: €111 million).

DEUTZ Group: Change in cash and cash equivalents

P046_Chart: DEUTZ Group: Change in cash and cash equivalents

1) Capital expenditure on intangible assets, investments, property, plant and equipment.